问题详情

TQCompany,alistedcompany,recentlywentintoadministration(ithadbecomeinsolventandwasbeingmanagedbyafirmofinsolvencypractitioners).Agroupofshareholdersexpressedthebeliefthatitwasthechairman,MissHeikeHoiku,whowasprimarilytoblame.Althoughthecompany’smanagementhadmadeanumberofstrategicerrorsthatbroughtaboutthecompanyfailure,theshareholdersblamedthechairmanforfailingtoholdseniormanagementtoaccount.Inparticular,theywereangrythatMissHoikuhadnotchallengedchiefexecutiveRupertSmithwhowasregardedbysomeasarrogantanddomineering.SomesaidthatMissHoikuwasscaredofMrSmith.
SomeshareholderswrotealettertoMissHoikulastyeardemandingthatsheholdMrSmithtoaccountforanumberofpreviousstrategicerrors.Theyalsoaskedhertoexplainwhyshehadnotwarnedofthestrategicproblemsinherchairman’sstatementintheannualreportearlierintheyear.Inparticular,theyaskedifshecouldremoveMrSmithfromofficeforincompetence.MissHoikurepliedsayingthatwhilstsheunderstoodtheirconcerns,itwasdifficulttoremoveaservingchiefexecutivefromoffice.
SomeoftheshareholdersbelievedthatMrSmithmayhaveperformedbetterinhisrolehadhisrewardpackagebeenbetterdesignedinthefirstplace.TherewaspreviouslyaremunerationcommitteeatTQbutwhentwoofitsfournon-executivemembersleftthecompany,theywerenotreplacedandsothecommitteeeffectivelycollapsed.
MrSmithwasthenabletoproposehisownremunerationpackageandMissHoikudidnotfeelabletorefusehim.
Hemassivelyincreasedtheproportionofthepackagethatwasbasicsalaryandalsoawardedhimselfanewandmuchmoreexpensivecompanycar.Someshareholdersregardedthecaras‘excessively’expensive.Inaddition,suspectingthatthecompany’sperformancemightdeterioratethisyear,heexercisedallofhisshareoptionslastyearandimmediatelysoldallofhissharesinTQCompany.
ItwasnotedthatMrSmithspentlongperiodsoftimetravellingawayoncompanybusinesswhilstlessexperienceddirectorsstruggledwithimplementingstrategyatthecompanyheadquarters.Thismeantthatoperationalprocedureswereoftenuncoordinatedandthiswasoneofthecausesoftheeventualstrategicfailure.
(a)MissHoikustatedthatitwasdifficulttoremoveaservingchiefexecutivefromoffice.
Required:
(i)Explainthewaysinwhichacompanydirectorcanleavetheserviceofaboard.(4marks)
(ii)DiscussMissHoiku’sstatementthatitisdifficulttoremoveaservingchiefexecutivefromaboard.
(4marks)
(b)Assess,inthecontextofthecase,theimportanceofthechairman’sstatementtoshareholdersinTQ
Company’sannualreport.(5marks)
(c)CriticisethestructureoftherewardpackagethatMrSmithawardedhimself.(4marks)
(d)CriticiseMissHoiku’sperformanceaschairmanofTQCompany.(8marks)


请帮忙给出正确答案和分析，谢谢！